Failure is the route to innovation

The bus industry must innovate or die. We just need someone to stop making excuses, take a chance and be prepared to fail

Some companies are offering a glimmer of hope with bold new innovations, like Slide from RATP Dev

By Mike Fletcher, mhd partnership

In the previous edition of Passenger Transit (PT152), there was a synopsis of the JP Morgan research paper into why the big four bus groups are struggling to grow revenue, and one line struck a chord with me. While many had thought the downturn in fortune was down to the economic climate, here it said ‘the root cause is a shift in our travel behaviour’.

Basically, we used to do it one way, and now, over time, we are doing it another. Happens all the time.

So, if the nation is changing its travel habits, shouldn’t the ‘Big Four’ bus groups alter their strategy accordingly? Should they be giving the public a solution to their 21st century needs rather than what they are comfortable offering? If the corporates keep things very much as they are, the decline can only continue.

Evidence for change comes from other sectors where habits have also altered significantly.

The retail landscape has changed beyond comparison over the last 20 years. Shopping hubs such as Gloucester are ghost towns, most shops are open on Sundays, out-of-town retail parks are everywhere, we have shops within shops, click and collect along with the small matter of online shopping – websites ready to take our money 24/7, 365 days a year at the touch of a button.

Retail is such a fiercely competitive sector that everyone is trying out-do everyone else, attempting to gain that little advantage in pursuit of our custom. Customers expect shops to fit around how they live their lives and retailers know they must adapt, innovate or die a slow, painful death.

An example of how innovation, design and technology can improve transport can be seen with Uber. Black cabs had been plying their trade in London the same way for as long as I can remember – being hailed on the side of the road, only accepting cash for a final fare the customer was unaware of until the journey had ended. Then along came Uber to revolutionise an industry by matching technology to the changing needs of the capital’s travellers. Yet, it wasn’t the vehicles they improved. They didn’t pimp them with free Wi-Fi, USB chargers, glitzy LED lights, panoramic roofs, sofas, TV screens. They knew it was the whole experience people wanted improving, not the physical journey itself. It was the ease, speed and simplicity that proved revolutionary.

Uber understood that the future of taxi travel was to make purchasing easier, faster, more seamless, more thoughtless and more immediate.

No stops to locate, no timetables to study, no tickets to decipher, no cash to find.

By comparison, the overall experience of bus travel is largely the same as it was back in the ‘70s. It can be criticised for a failure to keep pace with the ever-changing needs of the customer and their growing scarcity of time. Whilst information is now all around us, this almost exhaustive list can often lead to confusion.

Take the challenge of a new user on a journey with their local operator. They need to find out where the bus stops near them, where it goes, at what time past the hour (maybe Google for those three?) and ideally how much it will cost (the operator’s website?). They then must brave the elements walking to the bus stop, wait at an exposed shelter, pay their fare (often cash only and sometimes the exact fare too) before the bus takes them around the houses sometimes picking up no one else until the destination is reached.

Assuming your knowledge of public transport starts at zero, the whole process of getting the bus can hardly be described as easy.

What the customer currently experiences and what they could potentially receive are poles apart and operators’ desire to press for a change to the status quo should be questioned.

Unlike most retail businesses, some bus companies have the luxury of a large captive market – whether we like it or not many bus users have little choice in their mode of transport. If your phone provider, supermarket or gym gives you a poor service, you have a plethora of choice should you want to take your custom elsewhere. Many bus users don’t have that luxury, and unfortunately, bus operators know this. They don’t have to change, they don’t have to innovate, and improving what they do is not always a necessity.

From a customer’s perspective, the speed of innovation in the bus industry can be frustrating. Technology and service standards that have been commonplace for years in retail – online shopping, mobile phone apps and contactless payments – are relative newcomers to the bus experience.

McDonald’s have had contactless payment in the UK since 2011, yet even some of the large bus companies haven’t implemented it at all a whole six years later. Visit London, and you can’t help but be impressed by Transport for London’s capped payment, pay-as-you-go facility; it’s easy, fast, seamless, thoughtless and immediate. Yet mention this outside the M25, and all you get is a collective shake of the head. Always a reason why it can’t be done, although I have read this morning that the Keighley arm of Transdev is trialling it (thumbs up emoji thing).

We believe the focus of design, innovation and technology shouldn’t be to make public transport memorable, experiential, exciting or entertaining – it should be directed at making the whole customer experience so seamless you don’t even notice it. As seamless as getting in your car in the morning. Well designed on-brand liveries, timetables and advertising should be the starting point but the key driver to breaking down those obvious customer barriers lies in improving the experience as a whole. Trying new things, learning from mistakes.

If we designed a transport service from scratch for the 21st-century customer, would we end up with the bus as we currently know it? I very much doubt it.

We should trust our instincts more and not rely solely on customer research to drive growth. When put on the spot about what customers want from their bus service the answers are all too predictable – “be more punctual”, “be cheaper”, “be faster” or “be more reliable”. Yet these things are often out of the operator’s control and therefore hardest to implement. Thus, customers are asked if they would like wireless charging, faster Wi-Fi, leather seats, double glazing or lower emissions. All great additions but are they motivators to try the bus in the first place?

As an industry, we need to think about what can we do differently in order attract new customers and change the perception of bus travel. Innovating to find solutions to everyday problems – ignoring the past and concentrating solely on the future.

And some companies are offering a glimmer of hope.

RATP Dev is trialling their Slide brand (an app-based travel sharing service, purely targeting commuters) in Bristol, whilst the Transdev team have hit on the app-based idea VAMOOZ to help utilise their school fleet for on-demand day trips. And if their quarterly magazine is anything to go by that’s not all they’ve got up their sleeve.

There’s also former Chiltern Railways commercial director Thomas Ableman, who has recently launched Sn-ap. An on-demand, digital offering that runs coaches in response to customer demand, meaning they go where people want, and at times they want to go.

Going back to the stagnation of the ‘Big Four’, shouldn’t it be them driving innovation through the likes of experimental routes, different vehicle types, supply/demand pricing structures? Trying out new and completely different ideas, ideas that may well fail. In fact, most probably will if they are different enough. Historically real innovation comes from failure and as Einstein said: “Only those who attempt the absurd can achieve the impossible.”

We know they can do it, we truly believe bus companies can change the face of public transport as customers know it.

We just need someone to stop making excuses about why it can’t be done and take a chance, be prepared to fail and trust that creativity and innovation will win in the end.

About the author:

Mike Fletcher is account director at the mhd partnership. With a lot of thinking and some common sense, he helps clients get more bums on more seats, more often.